Self-build. The phrase conjures images of affluent older people with overambitious projects that drag on for months and go hopelessly over budget.
While this is a stereotype inspired by the popular Channel 4 programme Grand Designs, presented by Kevin McCloud, it isn’t so far from the truth.
The archetypal self-builder is able to draw on substantial equity and savings to fund the building of their dream home. The average project, including the purchase of land, costs about a quarter of a million pounds – a figure well out of reach for many first-time buyers.
“We always think of Grand Designs when we think of self-build and even the government website has a picture of Kevin McCloud on it,” says Yolande Barnes, director of residential research at Savills, the estate agent.
“I think you’ve got to get away from that very bespoke product which is actually incredibly expensive to build and requires that big capital and emotional investment and move towards a much more standard product.”
The government is keen for self-build – or what it now calls “custom build” – to become a mainstream housing option. In 2011, as part of its Housing Strategy for England, it announced plans to double the output of self-build housing from 100,000 units to 200,000 over the next decade.
The government has launched a three-year £30m Revolving Loan Fund to provide short-term project finance for self-build group schemes. In October 2013, it announced that self-builders would be exempted from paying the community infrastructure levy, which can add between 10 to 15 per cent to build costs.
Research suggests there is big potential for the UK market. We build far fewer of our own homes than European countries. About 12,000 self-build homes are completed in the UK each year – just 7.6 per cent of new housing supply. By comparison, more than half of Hungary’s housing supply is self-built. In France it is 38 per cent, in Sweden 30 per cent and in the Netherlands 10 per cent.
However, a report published in May by Lloyds Banking Group in partnership with the University of York’s Centre for Housing Policy warned that the self-build market requires “significant further structural and cultural change” – beyond the current initiatives – if it is to become a conventional housing option within the next decade.
“If the sector is to become a mainstream component of the housing market, attracting younger, less affluent households, its structures and processes – along with the support provided – will have to be smarter and more co-ordinated,” says Alison Wallace, one of the authors of the Build-it-Yourself report and a research fellow at the Centre for Housing Policy.
Experts agree that greater focus needs to be placed on multi-plot sites or group provision if volumes are to grow significantly.
“I think group schemes are the way forward,” says Ted Stevens, chair of the National Self Build Association. “The current market place consists of mainly individuals in their later years who are building their dream retirement homes. But the potential of the market is the 20- and 30-somethings who are looking for an affordable home for themselves.”
According to Mr Stevens, two of the biggest obstacles remain securing a plot of land and the red tape of obtaining planning permissions. Financing the work is also tough.
But the situation is improving. Councils are now required to make more plots of land available for self-build projects. Mr Stevens believes there are many self-build plots in the pipeline from local councils. “There is a lot more happening at local authority level than many people realise,” he says.
Group schemes can vary significantly, with options ranging from co-housing schemes, eco-homes and developer-led projects (see below).
According to the Build-it-Yourself report, the role of local authorities is crucial in delivering a change in volume. However, most continue to operate in isolation, do not always see self-build as a priority and there is little sharing of experience. None as yet rival the scale of schemes in the Netherlands or Germany.
Ms Barnes of Savills suggests that one way to boost volumes would be for the government to introduce “build-to-own” initiatives similar to those now being seen in the “build-to-let” sector. This could involve the deferment of land payments as a way of making schemes more affordable.
On the individual self-build route, Ms Wallace says there needs to be an easing of access to finance for it to become more of an option for first-time buyers.
Currently, most self-builders need substantial savings to purchase the land and build the property. Most mortgages require deposits of about 20 to 25 per cent of costs, which can prove difficult for those on lower incomes.
However, access to land and finance will need to improve significantly before self-build can become commonplace in the UK.
“It’s very difficult to get a plot of land if you are an individual self-builder and until that becomes easier it won’t become mainstream housing option,” notes Mr Stevens. He says that on average, it takes about three to five years to find a building plot, followed by a year to get planning permission and one year to build the house.
He adds: “Our objective is for it to be as easy to go out and buy yourself a building plot as it is to buy a new home today.”
Ten tips for self-builders
1. Do your homework thoroughly. It takes years to qualify as an architect or a lawyer, and you will need a fair bit of design, planning, construction and legal knowledge to tackle a self-build. It will take at least a couple of years to climb the learning curve. So read the magazines, visit the self-build exhibitions, pore over the websites and talk to lots of other self-builders who have already done it. A little knowledge is a dangerous thing; real knowledge is priceless.
2. Work out where you may still need help and recruit really good advisers. So, for example, if you don’t know your way around the planning system, find someone who does. If you’re not a practical construction expert, sniff out someone who is. Don’t think you can do it all on your own.
3. Work out a realistic budget. Figure out what you can afford, and talk to mortgage providers to see what they might lend. Don’t overestimate or delude yourself. And always include a 10 per cent contingency.
4. Identify where you want to build. Use the Self Build Portal to assess the land and construction costs in different parts of the UK (it varies enormously). When you’ve decided where you want (and can afford) your new home you can begin plot hunting.
5. Clever self-builders acquire their plots before they go on the open market. So pound the streets, look over walls, stuff cards through letterboxes, exploit Google Earth and the Land Registry, or examine large-scale OS maps. All of these can help you find a piece of land that others may not have spotted.
6. If your budget is tight, investigate teaming up with others to form a group. By working together you could save 40 per cent of the cost of doing it on your own. And group self-builds don’t just build homes; they create fantastically supportive communities too.
7. Plot first; then house design. Not the other way around! Don’t begin to design your home until you have acquired a site, as every house design should respond to the specific plot’s views and orientation. Similarly, don’t decide on the method of construction until you know you have the plot.
8. When you have settled on your design, find a large flat area and (using tape) draw it out full scale, so you can check the layout really works. It is also helpful to engage with your neighbours to explain your plans and seek their support. If the neighbours don’t object, you will have a much easier route through the planning system.
9. Shop around to secure deals and discounts from materials suppliers, builders' merchants and tradesmen. Don’t accept the first quote for anything. Good negotiators can save tens of thousands of pounds on the final cost of their homes.
10. Invest in the fabric of your home. The basic envelope (walls/roof) is relatively cheap to build. So go for space that is really well insulated, rather than extras such as expensive taps and other high-tech gadgets.
Tips from Ted Stevens, chair of the National Self Build Association
Case studies: Self-build options
Option one: First-time buyers Jeff Pike, 33, a structural engineer, and his girlfriend Emma Keenan, 28, took self-building to heart with their two-bedroom house in Cheltenham, Gloucestershire.
The couple did almost everything themselves, from the design to the building. While Mr Pike admits the process was long and “hard, hard work”, he is proud of the result.
“It’s just as I planned it. We have something nobody else anywhere in the world has. Every last tiny detail is exactly as we chose it,” he says.
The couple bought their L-shaped plot from a local estate agent for £93,000 in 2008 and found it easy to get a 95 per cent interest-only self-build mortgage for £133,000.
Apart from the electrics, the heating system and external rendering and plastering, Mr Pike and his girlfriend did all of the work. They both had two full-time jobs, so spent evenings and weekends working on the house while living in a caravan on site for three years. The build took two and a half years.
Mr Pike says he learnt many lessons during the build. He says budding self-builders should really consider temporary accommodation, since living in a caravan quickly grew tiresome. They also found out the hard way the importance of hiring good professionals; the firm that rendered their house did a bad job.
He says having a strong personal relationship helps, too. “We started the project five years ago, when I was 28 and Emma was 23. You will fall out all the time and you’ve got to come through it.”
Option two: Individuals who like the idea of self-build but do not want the hassle of building it themselves can opt for a custom-built house.
Derbyshire-based Fairgrove Homes offers housebuyers this route. The developer will buy the site, arrange planning consent and install the infrastructure, while buyers can choose their location, design and a specification to suit their budget.
“We are traditional new homes developer on a small scale, therefore we are treating this as a halfway house between self-build and buying an off-the-shelf new home,” says Steve Midgley, managing director of Fairgrove.
There are different packages that buyers can choose from. The minimum build stage is called watertight, which has roof, windows and structural internal walls and allows the buyer to finish the property. There are also the options of basic, bronze, silver and gold specifications.
Mr Midgley says this option is “self-build without the risks and without the dirty hands”.
The process is much shorter than an individual self-build; it typically takes three months to install the infrastructure and then five to six months to build each house.